Go small on school choice

Evidence that the Trump administration will push for a major expansion of private school choice continues to mount. Initially, it was easy to scoff at Trump’s promise to invest an eye-popping $20 billion in school choice. But his repeated endorsements of school choice, his selection of choice advocate Betsy DeVos for secretary of education, and his request for federal choice legislation in last week’s joint address to Congress provide plenty of reasons to take his promise seriously.

Skepticism of swinging for the school choice fences is not limited to opponents of school choice. Indeed, choice supporters including Lindsey Burke of the Heritage Foundation and my American Enterprise Institute colleague Rick Hess have written about the potential downsides of a federal effort. The Obama administration’s overwrought, and ultimately counterproductive, support for Common Core should be a cautionary tale. If a poorly executed federal choice push fails on the national stage, it could substantially damage the progress the school choice movement has built from the bottom up.

But some advocates are bullish on Trump’s push, sensing a rare opportunity to “go big” on school choice. The question for those supporters and the administration should be, how can a federal program push choice without risking the movement’s undoing?

The specifics of Trump’s push are still up in the air, but based on the workable choice mechanisms, available political opportunities, and the president’s joint address, some scenarios are more likely than others. The most likely funding mechanism is a tax-credit scholarship program, which would give individuals and corporations a tax credit for donations made to a scholarship-granting organization (SGO). Tax-credit scholarships avoid the legal challenges that voucher programs invite because the government does not send funds to private schools; non-profit SGOs do. Seventeen states already have tax-credit programs and federal legislation has been offered before.

Political realities also favor this approach. A tax-credit scholarship could pass Congress with only 51 Senate votes as part of a tax-reform bill or budget reconciliation. But both of these legislative vehicles come with a tradeoff: it would not allow for a fully developed legislative proposal with regulations, civil-rights protections, or new administrative bodies to run it. The budget reconciliation cuts both ways, opening a window for passage but limiting how detailed the proposal could be.

Trump’s statements in his joint address to Congress were consistent with a tax-credit scholarship approach. He made clear he wants a targeted program, asking for “an education bill that funds school choice for disadvantaged youth.” He also illustrated the benefits of choice by introducing Denisha Merriweather, a woman whose educational success Trump credited to—you guessed it—a tax-credit scholarship.

Their political and legal feasibility makes targeted tax-credit scholarships the most likely route for a federal school choice push, but positive outcomes are not guaranteed. The specifics are easy to get wrong, including decisions on student eligibility, scholarship amounts, regulatory approaches, quality controls, and program evaluation. It’s also hard to imagine how a national program could operate without a national group to administer it, which would be hard to create in a budget reconciliation bill.

Can a federal push thread the needle of being simple enough to get through budget reconciliation and large enough to deliver effective school choice along the lines Trump has laid out? I am dubious, but if Trump insists on a $20 billion federal push, he should avoid “going big” with a single federal program. Instead, his administration should limit the federal role and diversify the investment in school choice by incentivizing states to create or build on their own choice programs. This approach would keep scholarship programs state affairs, allowing states to develop program particulars and giving them some skin in the game. Here is one potential structure in broad strokes.

The budget resolution could establish federal tax credits for individual and corporate donations to SGOs operating within taxpayers’ state of residence or operation. Limiting the amount of credits, using suggested limits of $4,500 for individuals and $100,000 for corporations as a starting point, could keep the cost to $20 billion. To qualify for the federal credit, states would have to contribute some of their own resources by either having or creating their own tax-credit scholarship or education savings account programs. States would have vested interests in making programs work, and ensure the design of SGOs, program regulations, and eligibility definitions for low income students made sense in local contexts. The law should also require that states reserve a small percentage of scholarship dollars to evaluate their programs.

Such a program would encourage a variety of state programs, but force nothing on them. It would also hit all of Trump’s high points. Feasible? Check. Targeted toward low-income students? Check. $20 billion? Check.

The program would have other benefits as well. It would acknowledge the difficulty of creating choice programs and allow a variety of approaches. States would be able to tailor their programs to their specific contexts and work on the local supply of private schools, two things Washington cannot do well. It would allow states to learn from each other and adjust their programs accordingly. And it would build local, self-sustaining state constituencies for choice programs.

This setup also avoids potential traps. It would not interfere with or force significant changes to existing state programs. It would not create additional federal bureaucracy. Most importantly, it would avoid the risk of a single federal program that, if not demonstrably successful, could create backlash against school choice writ large.

Such a tax credit program is feasible, but is it a good idea? Maybe, but it’s still a dicey proposition for the school choice movement. It risks spreading opposition to school choice, as has happened with federal pushes on issues like immigration reform. It risks moving too quickly in states that lack a constituency to sustain programs or are unprepared to do school choice well. It would place a number of small bets on school choice that could fail. However, these diversified risks are much better than a single roll of the dice on a national program. If Trump cannot be deterred from going big on school choice, he should at least pursue it in a way that minimizes the threats to its cause.

Nat Malkus is a research fellow in education policy studies at the American Enterprise Institute (AEI), where he specializes in K–12 education. Specifically, he applies quantitative data to education policy. His work focuses on school finance, charter schools, school choice, and the future of standardized testing.